On October 26, 2022, the SEC adopted final rules implementing the Dodd-Frank Act’s requirement for issuers to recover from current and former executives compensation that was erroneously paid due to an accounting restatement. The final rules require securities exchanges to adopt listing standards that will require listed companies to implement and disclose policies requiring the erroneously paid compensation to be recovered, on a “no fault” basis – that is, without regard to whether any misconduct occurred or whether an executive bears responsibility. The SEC’s Release covers a broad range of topics, including — importantly for readers of this blog — considerations relating to indemnification or insurance for the clawed-back compensation. The SEC’s October 26, 2022 press release about the new rules can be found here. The SEC’s fact sheet about the new rules can be found here. The SEC’s Release document (referred to below as the “Release”) can be found here.
Continue Reading Insurance Implications of the SEC’s New Compensation Clawback Rules